Goldman Sachs lifts Terex stock rating to Buy, target to $60

On Tuesday, Terex Corporation (NYSE:TEX) received a bullish update from Goldman Sachs, as the firm’s analyst upgraded the stock’s rating from Neutral to Buy. The price target was also raised significantly, from $45.00 to $60.00. This optimistic outlook is based on several factors that suggest a positive turn for the company. According to InvestingPro data, Terex currently trades at a P/E ratio of 12.75 and has demonstrated strong financial health with an overall score rated as "GOOD."

Goldman Sachs believes that the earnings for Terex’s Aerials segment are on the verge of recovery following a substantial 30% production cut in the first quarter. The declining year-over-year used inventories since December 2022 indicate an improving supply picture, which supports the upgrade decision. Additionally, the headwinds from tariffs have been incorporated into the current estimates, suggesting that the potential negative impacts are already accounted for in the company’s financial outlook. The company maintains strong fundamentals with a healthy current ratio of 2.11 and generated $201 million in levered free cash flow over the last twelve months.

The acquisition of Environmental Services Group, which now constitutes between 25-30% of Terex’s profits, is also highlighted as a contributor to a more balanced cyclical profile in the current economic cycle. This diversification of profits is seen as a positive development for the stability of the company’s earnings.

However, there is a noted risk factor associated with tariffs on Terex’s operations in Mexico, where the company benefits from the United States-Mexico-Canada Agreement (USMCA). Goldman Sachs has calculated that the potential tariff-related headwinds could pose a risk of approximately $0.50 to Terex’s financials, based on the company’s previous disclosures.

The upgrade by Goldman Sachs reflects a confidence in Terex’s ability to navigate through the current market conditions and capitalize on its strategic decisions, despite the potential risks that remain on the horizon. InvestingPro analysis reveals that Terex has maintained dividend payments for 13 consecutive years and offers a dividend yield of 1.52%. For deeper insights into Terex’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, covering over 1,400 US stocks with expert analysis and actionable intelligence.

In other recent news, Terex Corporation reported its first-quarter 2025 earnings, showcasing an impressive earnings per share (EPS) of $0.83, which significantly surpassed the forecast of $0.52. However, the company’s revenue fell slightly short of expectations, coming in at $1.2 billion compared to the anticipated $1.24 billion. Despite this, Terex’s strategic focus on operational efficiency and product innovation has been well-received by investors. In light of these results, Citi analyst Kyle Menges raised the price target for Terex shares to $51, maintaining a Neutral rating, while Baird analysts upgraded the stock to Outperform, increasing the price target to $66. UBS also adjusted its stance, upgrading Terex from Sell to Neutral, with a price target of $48, citing the company’s improvements and management performance. Terex’s recent Annual Meeting saw shareholders elect eight directors and approve executive compensation, reflecting strong governance practices. These developments highlight Terex’s ongoing efforts to navigate market challenges and drive growth.

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